What Is a Kentucky Highway Use Bond?
Individuals and companies in Kentucky who operate their commercial vehicles on public highways must post a Kentucky highway use bond. This requirement applies for transporting both goods and passengers. The bond guarantees to Kentucky authorities that highway users will pay all relevant taxes, fees, and penalties they owe to the state.
Highway use bonds, also known as mileage tax bonds, are similar to most other surety bonds. They work like a three-party contract. Your company that uses highways for its operations and needs to get bonded is the principal. The Kentucky Transportation Cabinet’s Division of Motor Carriers is the obligee. The surety is the third party that provides the bonding.
Questions about Mileage Tax Bond in Kentucky
Who needs to obtain a Kentucky highway use bond?
Any business that uses Kentucky highways for commercial operations with its vehicles needs to post a Kentucky highway use bond. The Kentucky Transportation Cabinet’s Division of Motor Carriers is the state authority that imposes the requirement for transportation of passengers and goods alike. This way, it ensures that companies will pay all applicable taxes and fees, and will comply with the Kentucky statutes. You can find the Kentucky highway use bond form online.
How much does a Kentucky highway use bond cost?
Your bond price depends on the bond amount that you have to post. The minimum required amount for Kentucky highway users is $1,000, or the company’s tax liability for four months, whichever is greater. Still, the bond amount cannot be more than $50,000.
Bond applicants have to cover only a bond premium and not the whole bond amount. If your finances are in good shape, you’re likely to pay between 1%-5% of the bonding amount. This means that for a $10,000 bond, you may end up paying only $1,000-$5,000.
The exact cost of your highway use tax bond is formulated on the basis of your personal and business finances. When you apply for bonding, your surety examines your personal credit score, business financials, and liquidity and assets. That’s how it can assess the level of risk associated with your bonding. If you have a solid profile, your bond premium will be lower.
|Bond Type||Surety Bond Amount||Above 700||Between 650-699|
|Kentucky Highway Use Bond||$1,000 to $50,000||$100-$300 to
For further information about the formation of your bond price, consult our surety bond cost page.
Can I get a Kentucky highway use bond with bad credit?
Lance Surety Bonds operates its Bad Credit Surety Bonds program to help applicants with problematic finances obtain the bond they need. It can be of use to businesses with low credit scores, tax liens, bankruptcies, or civil judgements.
If you have a credit score below 649, you can expect a bond premium in the range of 15%-17%. Since the bonding risk is higher, the increased price compensates for it. With us, you can always be sure that you’re getting the best price for your particular situation. We work with a number of A-rated, T-listed surety companies, allowing us us to shop around for you and offer you the best rate.
How Do I Get Bonded?
You can start your bonding process today by applying online for a free quote. If you want to get an exact bond price, you’ll need to send us your completed application along with all necessary paperwork.
Our How to Get Bonded page is an excellent resource on the details of the bonding process.
Do you need more help, or have questions about your application? Just call us at (877) 514-5146. Lance Surety Bonds’ experts will be happy to assist you.
How are bond claims handled for Kentucky highway use tax bonds?
Unlike insurance, surety bonds are not protection for your business. This means that if you transgress from applicable Kentucky laws, you may face a bond claim. That’s why it’s important to make all due payments of taxes, fees and penalties to state authorities.
In case you get a proven claim on your bond, you will need to provide compensation up to the penal sum of the bond. Your surety takes on the costs at first, but you have to repay it in full. Bond claims are not only financially damaging, though. They can also prevent you from getting bonded in the future. The best course of action is to avoid them altogether.
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